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Aging Kamiyama hopes to rejuvenate with IT startups

by Atsushi Tomoe

Kyodo

After a long, fruitless search for a new business base, entrepreneur Tetsu Sumita found himself lured by the unique appeal of a little-known remote town in western Japan nearly two years ago.

And it did not take much time for him to launch a venture in Kamiyama — a rural community that has set out on a quest to nurture information technology startups in a mountainous area dotted with terraced rice paddies.

“Their approach is different from others,” Sumita said, explaining why he chose the town in Tokushima Prefecture among rival bids from other places pursuing the dream of building an IT business cluster complex — a Silicon Valley in Japan.

“I’d been unable to find a place that made me think ‘This is it,’ ” the 51-year-old added, saying people in Kamiyama have treated him and his company as a partner, not a “guest,” ever since he first visited the town of 6,100 on the main island of Shikoku in spring 2012.

Earlier in the aftermath of the devastating earthquake and tsunami in March 2011, he scoured the country in vain for a suitable place for an office that would function as an alternative to the head office of his Tokyo-based digital content provider.

Having chosen Kamiyama, Sumita set up a company named Engawa Corp. for demonstration tests of televisions with 4K next-generation high-definition display technology.

Then he converted an unoccupied 90-year-old family residence into an office and decided to live temporarily on the upper floor of the sturdy wooden house until the completion of a new home under construction nearby.

“Time passes slowly here and the quiet atmosphere is ideal for creative jobs,” he said while sitting on the long engawa verandalike wraparound porch that is a noticeable feature of traditional Japanese houses and residences.

Hiroaki Bando, 32, a relative newcomer to Engawa Corp., said he steps out of the office to look at the pastoral scenery when he needs a timeout or short break from work.

“I can reset my mind by just relaxing and doing nothing,” said Bando, who works under Sumita’s hands-off approach alongside nearly two dozen colleagues whose average age is only around 30.

That figure is a stark contrast to the average of 58 for Kamiyama residents.

Faced with its declining, rapidly graying population, Kamiyama has seen its efforts to revitalize itself result in bringing 10 IT ventures there over the last three years.

This achievement has even made Kamiyama a place of pilgrimage for local officials and businesses from across the nation eager to discover the secret of its success, and find a solution to similar aging problems of their own.

Behind Kamiyama’s backwater appearance is an advanced IT infrastructure built at the prefectural government’s drive, which helped spread broadband access to almost all of Tokushima Prefecture. A demonstration test held in 2011 showed the access speed in Kamiyama was roughly 10 times faster than that of Tokyo when traffic was not heavy.

Another factor that sets Kamiyama apart is, as Sumita noted, its unorthodox approach toward potential stakeholders for new businesses.

Investment-hungry Japanese cities and towns have a tendency to bend over backward to win over business interests by, for instance, dangling a carrot in the form of tax breaks and subsidies. Experts say such an approach may be effective in tempting companies, but whether the newcomers stay for the long haul is another matter.

“We need companies that really want to come here,” said Shinya Ominami, head of nonprofit organization Green Valley, a key player in the Kamiyama scheme led by the private sector. “We never try to attract businesses by offering sweetener incentives. If they find some value in this town, things will go well after they move in.”

Ominami, a 60-year-old Kamiyama native who studied construction engineering and management at Stanford School of Engineering in the United States, stresses the importance of demonstrating the town for what it really is, rather than sprucing it up as a nice place to start up a business.

Chikahiro Terada, an entrepreneur from Tokyo, recounted how his Internet-based calling card management venture became the first to establish an IT presence in Kamiyama.

Terada was introduced to Ominami through an acquaintance in 2010 and the NPO chief did not make a “sales pitch” in any way. Instead, he recalled, Ominami “asked me to show simply that it’s possible to do business here.”

Kamiyama’s case has received attention from academic circles, too.

Masayuki Sasaki, an urban and cultural economics professor at Osaka City University, said it is “different from conventional attempts to entice factories or plants with public funds.”

“Kamiyama town has delivered successful examples of attracting creative human resources,” Sasaki said.

Sumita hopes Kamiyama will develop into a center of leading innovators, though there remain concerns over the lack of office facilities for potential newcomers.

But Ominami sees such a problem in a positive light, saying it “prevents an excessive inflow of ventures” and the current situation “matches the size of this town.”

For the moment, Ominami’s goal is modest.

“I just want to keep it going as a lively, decent community,” he said.

“We cannot prevent the town’s population from declining, but it’s possible that younger generations will grow in numbers here.”